Rideshare and Gig-Economy News

The Verge 2018 tech report card: Uber

2018 was supposed to be a recovery year for Uber. Sandwiched in between the disaster that was 2017, and the expectation that the company will go public in 2019, this was a year for Uber to put its sordid past behind it and stride confidently into the future.

Except it didn’t quite achieve it. Dara Khosrowshahi has certainly succeeded in putting a more grown-up face on Uber, but that wasn’t too hard given predecessor Travis Kalanick’s reputation for brogrammer shenanigans and the toxic workplace culture at the company’s San Francisco headquarters. All Khosrowshahi had to do was look apologetic when asked about Uber’s past scandals, and then quickly pivot to the company’s new ethos, which was safety and corporate responsibility. Easy, right?

The year had barely begun before Khosrowshahi’s plans began to unravel. In February, against all odds, Waymo’s lawsuit against Uber for the alleged theft of its self-driving trade secrets went to trial. The case had already resulted in reams of embarrassing details about Uber’s business practices being made public. But after a heated few days of testimony, the case was surprisingly settled: Uber agreed to pay a settlement of $245 million, and promised not to use any of Waymo’s tech in its self-driving cars.

But that tidy resolution was quickly forgotten when, a few weeks later, a self-driving Uber vehicle struck and killed a 49-year-old woman who was crossing a darkened street in Tempe, Arizona. It was the first time an autonomous vehicle had killed a pedestrian, and the crash instantly threw a harsh spotlight on Uber’s self-driving program. The company grounded its operation, while Khosrowshahi weighed whether to pull the plug altogether. Federal investigators determined the fatal crash could have been avoided had the vehicle’s automatic emergency brakes been enabled.

Fortunately, for Uber, we live in a media-saturated society in which terrible stories are routinely overshadowed by newer, more terrible stories. The news of the crash faded from memory, and now Uber is testing the waters for a self-driving relaunch. In August, Toyota announced it would invest $500 million in a joint self-driving car program with Uber. The company is still facing significant headwinds, including new reports about whether its autonomous technology is actually up to snuff. Still, it seems likely that Uber’s autonomous Volvo SUVs will back on the road in 2019.

But enough talk about Uber’s self-driving missteps. What about the app? You know, the thing Uber makes that you can actually use today? Well, you may have noticed a few new things appear in the app in 2018, products like Express Pool and new modes of transportation like bikes and scooters. Uber wants to be a one-stop shop for urban transportation; to make that happen, it began doing what large American companies love to do, which is gobbling up smaller companies. It started with Jump, the bikeshare startup, and now it’s considering whether to buy a dockless scooter company. It also started experimenting with car-sharing and public transportation.

Of course, like all things that have to do with Uber, there’s a huge caveat here. Along with Lyft, the company has been shown to exacerbate traffic congestion in a lot of major cities, undercutting its central argument that ride-sharing can help drive down vehicle ownership. Uber is also poaching riders from public transportation, which could make it more difficult to adequately fund subways and buses. Of course, ride-sharing is still only a fraction of a percent of total vehicle miles traveled in the US. So Uber isn’t the only problem, nor is it really the solution.

Is Uber a real business?

Which leaves the company in a weird place as it nears its long-awaited IPO. (Uber filed confidential documents with the federal government earlier this month, indicating it would likely go public in the latter half of 2019.) Uber has weathered its worse crises and emerged a transportation staple in most major cities around the world. It has captured almost 70 percent of the market, disrupted the taxi industry, and yet never posted a profitable quarter. Its drivers continue to lose important legal battles challenging their classification as independent contractors, but major markets like New York City are rewriting the rules to improve working conditions for drivers. Its self-driving program continues to draw in investor cash, even though one of its cars literally killed a person.

Is Uber a real business? Or is it the ultimate representation of Silicon Valley’s inflated sense of itself? Next year, we may finally know the answer.